Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Direct method: This method uses the basis of cash for preparing the cash flows of statement. To state: the formula used under direct method for computing cash receipts from customers.

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Answer 1

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Plug Products Spark Filter Company Credit Debit Credit Debit Cash and Accounts Receivable $ 146,000 $ 95,000 Inventory 236,000 119,000 Buildings and Equipment (net) 288,000 187,000 Investment in Spark Filter Company 267,789 Cost of Goods Sold 172,000 137,000 Depreciation Expense 40,000 30,000 Current Liabilities $ 170,147 $ 53,947 Common Stock 192,000 73,000 Retained Earnings 460,000 216,000 Sales 275,053 225,053 Income from Spark Filter Company 52,589 Total $ 1,149,789 $ 1,149,789 $ 568,000 $ 568,000 On January 1, 20X8, Plug's inventory contained filters purchased…

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Answer 2

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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Answer 3

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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Answer 4

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 6

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

Answer 7

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

Answer 8

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 9

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author states the formulas used under direct method for computing cash receipts from customers.

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